topic Re: Insurance shocker in Community Chat

Insurance shocker

lovesrecess — Wed, 15 Apr 2020 22:12:51 GMT

We have had a life insurance policy for 30 years. Got a letter yesterday saying we must send the company a check for $1300 by May 1 or the policy is cancelled. No explanation.has anyone ever faced a situation like this? Oh, and if we send the money we can keep the policy and our premium will be $1200 per month. I called and the woman who is one of the "experts" it is perfectly legal and they are raising the premium because DH is over 70. How can this be legal? She said if we wanted to cash out of the policy they would give us $269.00 for it. It is a policy worth $150,000 for each of us. Not a huge amount for some people, but what a racket this is! Can't sell the policy. That is also a racket and we have looked into it. The company is a large, well- known one.

Re: Insurance shocker

godi — Wed, 15 Apr 2020 22:15:45 GMT

I wonder if it has to do with the virus? That's alarming though. Can you call your area governors hotline? If that's gouging they should be reported.

Re: Insurance shocker

september — Wed, 15 Apr 2020 22:17:07 GMT

I think you need to get out your policy, and read the terms. Sorry for this!

Re: Insurance shocker

Snowpuppy — Wed, 15 Apr 2020 22:18:49 GMT

Whole life policies are always a poor investment.

As you age the premiums go up exponentially as you just found out. While your coverage has a guarantee of paying $xxx no company will guarantee your the price of premiums over 30 yrs.

Re: Insurance shocker

patbz — Wed, 15 Apr 2020 22:20:30 GMT

About seven years ago DH and I had that happen with our long-term care policies. The price doubled, so our costs went from $2000 to $4000. This happened to many and reason was bank crisis and the huge increase in convalescent costs. We kept the policies.

Re: Insurance shocker

Pearlee — Wed, 15 Apr 2020 22:23:57 GMT

It's possible nobody is at work in their offices in your state and everyone is working from home but I would get in touch with my state's Dept of Insurance's legal department and also my state Attorney General's Consumer Protection division.
But first thing you need to do is to read your policy. No one can help you without this or this document because it has the terms. Be sure you have the original of what you signed.

Re: Insurance shocker

50Mickey — Wed, 15 Apr 2020 22:29:21 GMT

That sounds like term insurance. When I retired in 2004 I took out 2 $150,000 on my self and my husband because I had a minor child and I wanted protection until she finished college. The premiums stayed the same for 15 years. This term was level until 2019 and the then premiums went through the roof. We no longer need this coverage so I dropped it. Term insurance is basically renting insurance for when you need it and it is cheap. Once you reach a certain age it is no longer affordable. Whole life basically has a premium that does not change but many do not think it is a good investment.

Re: Insurance shocker

sann — Wed, 15 Apr 2020 22:36:53 GMT

If you can discuss this with an attorney.!

Re: Insurance shocker

50Mickey — Wed, 15 Apr 2020 22:49:57 GMT

I think you need to read your policy. This does not sound like whole life. I am willing to bet that you bought a term policy. The premiums stay the same for a period of years and then they skyrocket. You basically rented coverage. It is not a ripoff or anything illegal if it term insurance.

Re: Insurance shocker

KKJ — Wed, 15 Apr 2020 23:07:13 GMT

DH and I are what you call insurance poor. We have several different life ins. policies we've been paying on prob.30 yrs. They are ones that have accumulated cash value but the death benefit is set amount. Is that a term policy?

Re: Insurance shocker

Nuttmeg — Wed, 15 Apr 2020 23:08:36 GMT

@lovesrecess

My sister and her husband have term life insurance. Her premiums have increased like yours. She is continuing to pay for now.

Re: Insurance shocker

Mom2Dogs — Wed, 15 Apr 2020 23:20:16 GMT

@lovesrecess Do you have a financial advisor? If so they can run the numbers on your policy. One meeting with our advisors is spent going over our wills, insurance policies, etc., making sure that everything is up to date. They can probably advise you on the policy.

Re: Insurance shocker

esmerelda — Thu, 16 Apr 2020 00:11:23 GMT

@50Mickey wrote:
That sounds like term insurance. When I retired in 2004 I took out 2 $150,000 on my self and my husband because I had a minor child and I wanted protection until she finished college. The premiums stayed the same for 15 years. This term was level until 2019 and the then premiums went through the roof. We no longer need this coverage so I dropped it. Term insurance is basically renting insurance for when you need it and it is cheap. Once you reach a certain age it is no longer affordable. Whole life basically has a premium that does not change but many do not think it is a good investment.

@50Mickey I don't think term insurance has a value that can be cashed out, like $269 in this case. It's level coverage for the term, as you said. It can be renewed, probably a higher premium because the person being insured is a greater risk/older.

Re: Insurance shocker

esmerelda — Thu, 16 Apr 2020 00:16:09 GMT

@KKJ wrote:
DH and I are what you call insurance poor. We have several different life ins. policies we've been paying on prob.30 yrs. They are ones that have accumulated cash value but the death benefit is set amount. Is that a term policy?

@KKJ Only if you signed up for a 30 year term...which is unlikely. My experience has been with 10-year terms. I don't think any term policy accumulates cash value. You get the death benefit if the insured dies during the term of the policy.

The OP has had their policy for 30 years. Maybe you should prepare yourself for news like the OP has received. Or call your agent at least.

eta...NOMB but why so many policies? Don't say if you'd rather not.

Re: Insurance shocker

Carmie — Thu, 16 Apr 2020 00:18:14 GMT

Yep, we had this type of term insurance on my DH. It was taken out when our children were really young. It was so I could continue to raise the kids on one income if he were to pass.

When he turned 50, we got the letter. IMO, we no longer needed this life insurance. It was now too expensive to continue. Our kids were grown. It's good insurance for young people with children...not meant for older folks. It is supposed to be short term life insurance.

Re: Insurance shocker

ALRATIBA — Thu, 16 Apr 2020 00:21:33 GMT

That's a lot of insurance! My family has always been very frugal about the amount of insurance we carry. Just what's needed ....

My life insurance is a retirement benefit that doesn't cost me anything - and is enough to pay for funeral expenses.

Re: Insurance shocker

lovesrecess — Thu, 16 Apr 2020 00:25:13 GMT

It is a universal life policy

Re: Insurance shocker

lovesrecess — Thu, 16 Apr 2020 00:29:40 GMT

It’s universal life, not term or whole life

Re: Insurance shocker

lovesrecess — Thu, 16 Apr 2020 00:35:12 GMT

It is a universal life policy. We would never take out term insurance.

Re: Insurance shocker

esmerelda — Thu, 16 Apr 2020 00:39:56 GMT

I've only ever had term. What one has, if any at all, depends on why one has it...goals, intentions, etc.